Eurozone economic sentiment falls in August
Eurozone economic confidence fell in August to 103.5 from 104.5 in July, more than the estimated 104.1 fall.
The European Commission’s economic sentiment indicator confidence dropped as sentiment soured across all business sectors apart from construction and financial services.
The largest drops in economic confidence were registered in the Netherlands with -3.6, followed by Italy -2.1, Spain -1.5 and Germany with a 1.1 point drop. However, in France it increased by 0.8.
Industrial confidence fell -1.8 points to -4.2, due to a deterioration in managers' assessments of the current level of their order books, which fell to its lowest level since February 2009.
Consumer confidence eased by -0.6 points, due to pessimistic views on future unemployment, which were outweighed by higher savings expectations and more optimistic views on the general economic situation. Retail trade confidence plummeted by -2.7 points due to managers' negative views on the present and expected business situation.
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: “The main hit came from a fall in industrial confidence, while services sentiment fell only marginally. Consumer sentiment also declined, in line with the advance estimate. Across the major economies, sentiment fell most in Spain and Italy, but weakness was also recorded in Germany. In France, however, sentiment improved marginally due to a small rise in services, retail, and construction confidence.
“The dip in sentiment adds to our suspicion that eurozone gross domestic product (GDP) growth will slow in the second half of the year, after a very strong first half. But the chart also shows that the survey’s GDP forecast, using the headline sentiment index, has not moved much on this month’s dip. Further weakness would be needed to tell a clear story of a slowdown, based on this survey at least.”
The decrease in the economic sentiment indicator for the European Union (EU) was marginally smaller at -0.9 than that in the eurozone due to improved sentiment in the UK, the largest non-eurozone economy, where it improved by +1.4.
EU developments were broadly similar to those in the eurozone, but with mild drops seen in services and consumer confidence, and a sharp decline in construction confidence. Confidence in the financial services space was also stronger than in the eurozone.